Israel had been demanding that any ceasefire deal include a condition that allows its troops to remain in Gaza over the 72-hour truce which it says it would utilise to locate and neutralise tunnels infiltrating into Israel.
The announcement of the temporary truce deal between the two sides while international mediators work on a lasting ceasefire, was made in a statement released in New Delhi, where US Secretary of State John Kerry is on a visit.
Hamas and Islamic Jihad leaders are also camping in the Egyptian capital but talks with Israel are carried out informally through mediators as the militant factions do not recognise the Jewish state.
"We urge all parties to act with restraint until this humanitarian ceasefire begins, and to fully abide by their commitments during the ceasefire," Kerry, along with UN Secretary General Ban Ki-moon said in the announcement.
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"This ceasefire is critical to giving innocent civilians a much-needed reprieve from violence," they added.
"This gives the sides, through the Egyptian mediators, the opportunity to reach a sustainable arrangement that will address Israel's security concerns, as well as ensure a better future for Gazans," Blair said.
Other world leaders have also welcomed the 72-hour ceasefire deal hoping to convert it into a more permanent one.
The PA delegation is likely to be headed by President Mahmoud Abbas himself who had earlier expressed dismay at being left out in international efforts to work out a ceasefire agreement.